Central bank intervenes to check currency fall

Exchange rate was listed from VND23,020-23,090 at local banks at 1 p.m. July 18, 2018. Photo by Reuters/Kham

The dong showed signs of stability on Wednesday, rising slightly against the dollar as the State Bank of Vietnam intervened to increase foreign currency supply.

Local currency exchangers were selling a U.S. dollar for VND23,300 at 1 p.m. Wednesday, down VND50 from the peak of VND23,350 of last week. Their purchase price was VND23,230.

“Demand for USD has considerably decreased, so we’ve lowered the rate,” said a money changer in Disctrict 1, Ho Chi Minh City.

The VND/USD rate has also stabilized in commercial banks. Vietcombank has been trading U.S. dollars at VND23,010-23,080 for the last three days. The corresponding range was VND23,020-23,090 at Eximbank and other local banks.

This is a good sign for foreign currency liquidity, said the vice chairman of a joint stock bank in the South who asked not be named.

“In the last few days, the central bank has been selling dollars to limit fluctuations in the USD/VND exchange rate,” the banker said.

This intervention was one of the reasons behind the increase in the dong’s value against the U.S. dollar, the source added.